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HB 110: Cigarette Taxes - 2
         HB 62, 63 and 110 each provided for increases in taxes on cigarettes and other tobacco products.          Under existing statutes, cigarettes are taxed at a rate of 12 cents per pack, and other tobacco products (cigars, snuff, etc.) are taxed at 20% of wholesale purchase price.          One third of the tax that is currently collected is distributed to towns, cities and counties, and the remainder is deposited into the general fund.          HB 62 increased the tax on cigarettes by 48 cents per pack, raising the total tax to 60 cents a pack. The original 12 cents per pack would continue to flow to towns, cities and counties. The new revenue generated from the additional 48 cents per pack would be dedicated to the Wyoming Tobacco Settlement Trust Fund until $25,000,000 had been deposited. Revenue would then fund Wyoming's substance abuse control program, and once that plan was fully funded, any revenue left would be deposited into the general fund.          HB 63 increased taxes on all other tobacco products except cigarettes. To the current tax of 20% of wholesale purchase price, an additional 10 % tax would be added. The revenue generated by current tax levels would continue to flow into the general fund, while the new revenue generated by the increase in taxes would be dedicated to the substance abuse control plan.          HB 110 was similar to HB 62, but increased taxes on cigarettes up to 72 cents per pack instead of 60 cents. The distribution of the new revenue generated by HB 110 would be different.          Under HB 110, towns, cities and counties would continue to receive one-third of the revenue generated under the old tax rate. Taxes generated from other tobacco products would continue to be deposited in the general fund.          Until June 30, 2006, the new revenue generated by the additional tax would be earmarked to pay for Wyoming's child health insurance program. After that program was fully funded, any remaining revenue would be divided as follows:
         Starting in July 2006, all revenue generated by the additional tax would be deposited in the general fund.          Proponents of these bills to increase taxes on tobacco products argued that Wyoming's taxes on tobacco are relatively low, and noted that higher prices for tobacco products discourage young people from starting or maintaining the tobacco habit. They also noted that the revenue generated by higher taxes would be very helpful in paying for other needed medical programs in Wyoming such as the child health insurance program, the substance abuse control program, and so on.          Opponents worried that an increase in taxes might harm Wyoming businesses that sell tobacco products. They also argued that increased cigarette taxes might be burdensome to low income and elderly citizens.          HB 110 was the only one of these three bills to survive the journey through the House Revenue Committee, which passed it on a 5-3 vote. HB 62 was tabled, and HB 63 was killed on a 6-2 vote.          HB 110 was amended in the House to reduce the total tax on cigarettes from the proposed 72 cents per pack down to 60 cents per pack. Amendments were repeatedly offered to reduce the tax even further, but all additional reduction attempts failed.          In the Senate, the revenue generated by the increase in taxes was de-earmarked. That is, instead of going directly to fund the various specified programs, the money instead would flow into the General Fund, to be appropriated as the Legislature saw fit.          The House passed HB 110, with the total tax on cigarettes at 60 cents per pack and with the revenue earmarked for specified programs, on a 40-19 vote.          The Senate passed HB 110 with the revenue to flow into the General Fund, on a 20-10 vote.          The House did not accept the Senate version of the bill changing the where the new revenue would be directed, and a conference committee was assigned to work out a solution. The conference committee resolved the issue in favor of the Senate version, so the funds will flow into the General Fund rather than being dedicated to specific programs. In this form, HB 110 was signed into law by Governor Freudenthal.          The votes listed below are the House and Senate Third Reading (final passage) votes.          A YES vote means the legislator supported raising taxes on cigarettes to a total of 60 cents per package.          A NO vote means the legislator opposed raising taxes on cigarettes to that level.
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